Fighting For Survival

September 21, 2007
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GRAND RAPIDS — Two manufacturers are looking for tax relief and plan to ask city commissioners for permission to join the state's Tool & Die Renaissance Recovery Zone, which would give them a nearly tax-exempt status for years and a better chance to find new clients through a combined marketing effort with other members.

Although both are hoping to join different coalitions, their reason for wanting to join is the same: cheaper foreign competition.

"My main concern is not the local competition, but the global competition we face," said Ken VanNoord, president of Grand Die Engravers Inc.

Grand Die Engravers wants to join the Tool Makers Alliance, a collaborative that the Michigan Economic Development Corp. approved in January. The company makes plastic injection molds for the auto, appliance and medical industries in its plant at

233 Wealthy St. SW.

"As you know, the tool and die industry is under extreme economic pressure from manufacturers in the Orient. Grand Die Engravers Inc. is no exception. We are literally fighting for survival and looking for every opportunity to be price competitive," VanNoord recently told the city's Economic Development Project Team.

Grand Die Engravers has 24 employees who VanNoord said earn from $60,000 to $75,000 annually. He estimated his workers are paid roughly $20 an hour more than those who work overseas.

"We're trying to protect these jobs," he said.

If he can make the economics work, VanNoord said his firm could buy $600,000 worth of new equipment and add five jobs to the payroll within the next three years. But to do those things, he said Grand Engravers needs to get into the Recovery Zone.

"The city of Grand Rapids would be financially ahead by granting us admission into the alliance," he said of the jobs the city would retain. "We'll compete with anyone in the world on a level playing field."

Scott MacDonald, CEO of Matador Tool & Die at

1959 Will Ave. NW
, echoed the words VanNoord spoke. He wants his company to join the United Tooling Coalition, which he said would help Matador Tool & Die compete in the global marketplace.

"It's been a struggle. It hasn't been easy," he said.

The Matador plant is in the city's nearly tax-free Renaissance Zone, but that benefit goes away when the zone expires in 2012. Being able to join UTC would give Matador the equivalent of a zone extension.

"We invested over $1 million to double the size of the facility and committed over $800,000 for additional equipment in anticipation of higher sales," said McDonald of the company's Ren Zone investment.

"Unfortunately, sales have dropped, and much of the work that was available was sent overseas. We held on to our full staff of employees as long as we could but eventually were forced to lay off 15 people," he added.

The layoff dropped Matador to 38 employees, down from the company's high of 55 in 2005. Matador produces injection molds, die-cast dies and trim dies for multiple industries.

Another concern McDonald has is that the automakers, a group his firm serves, is gaining more control over the tooling business. He said, as a small shop, Matador has little influence with the OEMs. But he said that situation could change if Matador can join a collaborative.

"That larger voice will have a better chance of reaching the OEMs," he said.

Dan Oegema of the city's Economic Development Office said commissioners could let the firms join the Recovery Zone for five years and decide later whether the companies need more time in the zone. The tax benefits of a Recovery Zone can last up to 15 years.

Mayor George Heartwell said he didn't want to see those jobs go elsewhere, especially overseas. But he also knows that granting both companies their requests would result in less tax revenue for the city at a time when those dollars are needed for city services.

"We know going in we're sharing the risk with you," he said.

City commissioners could get both requests soon. Should the city approve both, the applications would go to the MEDC for final approval.     

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